Trump’s Energy Agenda 2.0

Trump’s second presidency started with a strong push to change US environmental policy. Right at the start, the president put in motion the plan to re-exit the Paris Agreement and signed an executive order to “unleash American energy,” which established a framework to encourage domestic energy production and weaken the electric vehicle (EV) mandate.

In the months that followed, federal lands and offshore areas previously off-limits to drilling were reopened for leasing, and several LNG export projects were reapproved. The Interior Department cleared new exploration in Alaska’s Arctic zones, while the Bureau of Land Management simplified environmental reviews for oil and gas projects in the western states. Still, several of these actions are facing ongoing legal challenges from environmental groups, and whilst headlines show US crude production reaching record levels this year, the bigger picture is that growth in output is slowing, with production expected to remain largely flat year-on-year in 2026. Companies remain cautious about spending on the back of lower oil prices and expectations of rising oversupply. The oil rig count declined in August to its lowest level in nearly four years, although a modest uptick has been seen since then. The Energy Information Agency (EIA) has recently warned that new wells are needed in order to sustain (or increase) production levels.

Trump’s administration has also taken several steps targeting vehicle emissions. The Environmental Protection Agency (EPA) is moving to roll back rules finalised in 2024 that require carmakers to sell more electric or low-emission cars from model year 2027 onward, with the process well underway. The National Highway Traffic Safety Administration (NHTSA) has begun relaxing fuel efficiency targets. Separately, the “One Big Beautiful Bill” reduced or cancelled several clean-energy incentives introduced under Biden’s “Inflation Reduction Act.” In particular, tax credits for the purchase of new and used EVs are no longer available after September 30. While the reversal of these policies is being legally challenged on many fronts, the industry response is already visible. Several automakers have slowed their EV rollout plans. For example, General Motors, the largest US carmaker, recently acknowledged it is scaling back its EV ambitions by slowing production at EV plants and shifting investment toward hybrids and gasoline vehicles in response to the changing regulatory framework and weaker demand.

Changes to EV targets are expected to slow the decline in US oil demand. Ernst & Young now expects EVs to account for half of new US car sales by 2038, five years later than initially projected. The decline in US refining runs will also be shallower than previously envisaged, which will have implications for tanker trade. It will reduce US crude export potential, with more barrels retained domestically. At the same time, this will also add an element of support to US crude imports, mainly sourced from the Atlantic Basin. On the products side, stronger runs suggest additional CPP export potential; however, much will depend on underlying domestic demand levels.

Trump’s environmental policy is also reaching beyond domestic borders. The International Energy Agency (IEA) has come under increasing criticism, as Trump’s administration rejects the peak oil demand theory. The agency is due to publish its long-term view of energy markets next week, where it will reintroduce the Current Policies Scenario (CPS), last published in 2019. This scenario reflects only policies already in place, without assuming new measures, announcements, or enhanced targets. The agency will continue publishing its Stated Policies Scenario (STEPS), which goes one step further and includes both implemented policies and officially announced plans or targets that are likely to be implemented.

In the maritime sector, strong US opposition to the IMO’s Net Zero Framework (NZF) was perhaps the key reason why the final vote on the agreed plan has been delayed by twelve months. In the weeks preceding the vote, the Trump administration warned that nations supporting the NZF could face retaliatory measures, including sanctions, visa restrictions, and commercial penalties. As a result, the industry is now facing an increased level of uncertainty – it is unlikely that the framework will be adopted in its current form next year.

To conclude, so far Trump’s policies have clearly offered some support to oil demand, likely delaying the inevitable decline in consumption. In terms of supply, higher demand levels should, in theory, encourage new exploration and investment; however, in reality, market fundamentals remain the key drivers behind investment decisions. Besides, with the exception of short-turnaround projects such as shale, new energy developments have long investment horizons, stretching well beyond the end of Trump’s second presidency.

Outlook for US Crude Oil Production (mbd)

East

The AG VLCC market began the week quietly following last week’s busy spell, with limited fresh enquiry reported. Owners were hopeful that activity would continue at a steady pace to help maintain recent rate levels. As the week progressed, the market remained relatively subdued. Despite some rumours of activity under the radar, on the surface enquiry was limited, and charterers appeared to be holding back in an effort to take further heat out of the market. As we reached the midway stage in the week, a few fresh enquiries emerged & rates looked like they were to be under further pressure. By the end of the week, the pace of enquiry had slowed further, leaving freight levels hanging in the balance & owners hoping the floor will soon be found. Today we are calling AG/China WS107.5 & AG/USG WS60.

Optimism was high at the start of the week for Suezmaxes in the AG, but as the VLCC market began to soften, sentiment quickly filtered down to the Suezmax segment. The position list remained broadly balanced throughout, and the latter part of the week saw a handful of Basrah–UKCM stems emerge, with WS75 repeated and effectively cemented as the prevailing level. Looking ahead, with Bahri festivities in full swing, activity is expected to be subdued during the first half of next week, before enquiry potentially picks up in the latter stages.

On Aframaxes, the Indo region saw an anticipated cool-off this week, with second-decade demand slowing. The TD14 printed lower closing at WS168. However sentiment among owners remained firm as the prompt list was date-sensitive, offering limited options. Looking ahead, charterers are expected to exert downward pressure as the list begins to open up into the third decade. Unless fresh stems emerge early, owners may have to defend levels to maintain current TCEs. We close the week assessing Indo/Up at 80kt x WS170.

West Africa

The WAF VLCC market remained quiet this week, with limited on the surface enquiry and the business that was being concluded was mainly kept under the radar. Early in the week, owners’ sentiment held firm, supported by steady freight levels but with the weaking rates in the adjacent market it was not long before WAF felt the pressure. As the week progressed, softer undertones began to appear. With enquiry continuing to remain thin, charterers gradually gained further leverage, attempting to chip away at last done levels. The WAF market closed the week steady but cautious, with rates under pressure and a fresh test will be required in the early part of next week. Today we are calling WAF/East WS101.

A steady flow of enquiry persisted for Suezmaxes this week, with upward movement in freight levels largely driven by the firming USG market. Fixtures around WS140 for USG-TA and a series of replacement cargoes helped maintain bullish sentiment among Mediterranean and Continent positions as WAF enquiry surfaced. At the height of activity, rates touched WS160 for WAF–UKCM runs, although fresh enquiry cooled towards the week’s close. The list of workable units remains balanced, and with ongoing local delays, there is potential for replacement business to materialise early next week.

Mediterranean

With November CPC programs effectively concluded, the market entered a holding pattern while charterers delayed committing to December stems. Despite the quietness in CPC activity, XMED routes performed well, with WS160 levels repeated across the week. Support from both the WAF and USG sectors kept Med tonnage positions firm, and owners are expected to head into next week confident of achieving WS165 and above for early December CPC loadings. Libya – Ningbo trading in mid to high 6’s for now.

An interesting week for Mediterranean Aframaxes with expectations not met for one camp. As the week began and availability of ships looked healthier for charterers the outlook seemed at best balanced. Activity was there but in more limited amounts and the usual Baltic index was noted to have slipped into the 190s, with an average XMED voyage achieving WS195. That was just a flash in the pan however as cargoes were quoted in earnest by mid-week and that combined with some difficult cargoes having to be replaced multiple times gave owners all the impetus they needed to push back. The benchmark Ceyhan voyage was concluded at WS205 with other XMEDs reaching WS207.5, 210 and even 220 by the close for a less attractive Mellitah to Fos run. Owners trying for CPC cargoes will now be hoping for even more and the going remains firm. Transatlantic runs remain very tricky for charterers given the firmness of the States market and the option for ships to ballast straight there and lock in very healthy returns. WS125 is no longer seen as outrageous for this movement and more should come. As we look forward owners remain in good cheer, and all markets provide good support.

US Gulf/Latin America

The Americas VLCC market began the week on a firm footing, with a few outstanding cargoes and steady freight levels in the USG and Brazil regions. The tonnage list remained relatively tight, supporting owner sentiment as charterers looked to find cover for end Nov/early Dec position.  As the week progressed, fresh enquiry slowed, and rates in the US began to edge lower in line with the adjacent markets. Despite this softening, activity levels in the States continued to move at a slow pace and owners remained cautiously optimistic that a pickup in demand could reverse the downwards pressure. Today we are calling USG/China $13.2m & Brazil/East WS98. 

North Sea

Ebb and flow in the North Sea as rates settled down then rebounded a tad. Most in the surrounding markets are bullish and this is certainly seeping into North Sea trading. We’ve seen plenty of ballasters setting their sights on the States mainly relets but those hanging around are still getting decent returns. Levels now sit just under WS160 with those in position targeting progressive gains into next week. We are still waiting on some refineries to come back online but we won’t see this until the December window so still a week out. We see the market firm for now with upside into next week.

Crude Tanker Spot Rates (WS)

Clean Products

East

Both LR1s and LR2s have had a reasonably active second half of the week. TC5 has held steady at WS145, and with recent activity supported by a strong FFA curve, an uptick in rates could be on the horizon. In the Far East, a few backhaul fixtures have been concluded at levels equivalent to SK/Singapore around $700k, marking a rate improvement and also delaying natural ballaster supply back to the Middle East. The LR2s, which had a sharp dip early in the week, have since regained momentum through decent activity, recovering part of the loss. TC1 was last reported on subs at WS132.5, with owners pushing for higher levels, while in the Far East, China/Oz cargoes were placed on subs at WS140. Meanwhile, the Aframax market remains robust across ME/FE, with LR2s covering condensate cargoes ex NWS at a premium to TC1, last done at WS140 basis NWS/Japan.

An active week overall with TC17 steady at 35 x WS215 as enquiry stayed consistent and the fixing window pushed into mid–second decade dates. Mid-week balance came as Singapore ballasters appeared, while TC12 saw light testing around 35 x WS145–150. A fresh cargo push into the backend combined with fewer ballasters expected (TC7 +10pts) leaves the outstanding list well-stacked into the weekend, keeping positive momentum in owners’ favour.

UK Continent

Straight TA cargoes have been in short supply this week for MRs and levels have remained circa 37 x WS105 all week. Owners interest to get to the USG was at fever pitch last week but this week the willingness to ballast to the USG has evaporated as the heart comes out of the States market. Thankfully for owners WAF has been much busier and this has been the long haul relief that owners needed as a backup for TA, so for those willing to fix down there this has been welcome relief. Rates have eased to 37 x WS170 to WAF, and this feels to be steady going into the weekend. The short haul has also been busier as well with the Handies remaining tight. The interesting point to the market now is that perceived historical differentials have been completely blown out and each route is running on its own merit and on its own supply/demand structure. This may moderate if we see the TA busier and the USG easing further, but for the moment it’s very much a case-by-case market. 

It has been a positive week for Handy owners in the North as we see XUKC close at 30 x WS185 and 30 x WS180 for UKC/MED. The front end of the list has been tricky to navigate through but there has been appetite for owners to trade XUKC barrels as there is faith in this steady sector for the short term even with MRs now jumping back on the XUKC runs. UKC/MED on the other hand has been assessed case by case as most owners have decided not to entertain this run with the lack of faith in TC6 being a driving factor. Weekend break comes at a good time to enable a few more vessel itineraries to firm up.

Med 

WAF moves have been the talk of the town in this relatively flat MR Med sector and with such little TA quoted, rates have been mostly guided by their UKC neighbours. 37 x WS170 has been the call for the majority for the WAF move, until later in the week where 5 points have slipped off, but this doesn’t necessarily show a softening of the market. More perhaps the desire to move that direction, as we see the USG market tumble down throughout the week, and the drag for routes in that direction, or even the ballast has been relinquished by owners. Moving into next week, we can anticipate rates to hover around these levels, but at some point soon this inflated premium for WAF we’ve seen will have to realign with normality and we await to see where the 2 routes will settle back down. 

All in all it has been a positive week for Handies in the Med. We opened with an overzealous push from owners seeing 30 x WS200 go on subs but quickly failing. The rationale behind this would be a tight list with minimal vanilla tonnage, an element which has remained through the week. In these conditions grade and load port sensitivity came ever more into play. Nonetheless, rates have slowly found stability at the 30 x WS170 mark with this being repeated multiple times – with enough enquiry helping to keep rates buoyed. For now, sentiment shows a level of acceptance before Monday comes around. The question to ask is have we found a new floor at the WS170 mark? How the weekend restock goes will help answer this question.

Clean Tanker Spot Rates (WS)

Dirty Products

Handy

Overall, it’s been a relatively uneventful week across the UKC and Med as activity has been sluggish despite fixing windows approaching mid-November. In Northwest Europe, there has been little to report with WS235 repeating a couple of times; however, some delays should keep the list in a trimmed state as we look to next week. If enquiry gets off to a fast start, we could see rates tick upward here. In the Med, the week started off positively as enquiry surfaced quickly. WS195 repeated consistently, but as the week progressed, activity slowed down, creating a softer feel here. Charterers will have their eyes on WS190 come Monday, but whether this can be achieved remains to be seen.

MR

MRs had a similar week to their Handy cousins, with few units in play in the North, enquiry struggled to surface. Would be WMed ballasters are expected to remain in play early next week as we edge closer to mid-month fixing windows. Rates here are expected to hold around the WS165–170 level for now. The Med saw activity mainly by way of Handy stems, with availability remaining for charterers, we expect to see levels soften back down toward the WS155 mark on next test.

Panamax

Panamaxes over in Europe have seen little by way of enquiry, with levels remaining flat between WS115-120 for now. With TD21 remaining hot, we don’t expect owners to hang around for elusive backhaul opportunities. WS210 plus will be on owners’ radars as we head into next for TD21, as enquiry continues to flow here. With a healthy amount of non-section 301 complaint Afras having left the region prior to the pausing of USTR punitive port fees, this has created a tightening of supply that Panamaxes have benefitted from and replenishment could take some time.

Dirty Product Tanker Spot Rates (WS)

Rates & Bunkers

Clean and Dirty Tanker Spot Market Developments – Spot WS and $/day TCE (a)

wk on wk changeNov 6thOct 29thLast Month*FFA Q4
TD3C VLCC AG-China WS-181101287297
TD3C VLCC AG-China TCE $/day-22,250106,750129,00059,25085,500
TD20 Suezmax WAF-UKC WS15160145106136
TD20 Suezmax WAF-UKC TCE $/day9,75080,00070,25045,25061,750
TD25 Aframax USG-UKC WS-3220223158199
TD25 Aframax USG-UKC TCE $/day-1,25062,25063,50038,75050,000
TC1 LR2 AG-Japan WS-9133141108 
TC1 LR2 AG-Japan TCE $/day-3,00031,50034,50022,250
TC18 MR USG-Brazil WS-51169221222225
TC18 MR USG-Brazil TCE $/day-9,75020,75030,50030,25029,750
TC5 LR1 AG-Japan WS-1150151113152
TC5 LR1 AG-Japan TCE $/day-2,25023,75026,00015,75024,250
TC7 MR Singapore-EC Aus WS6184178185188
TC7 MR Singapore-EC Aus TCE $/day1,00021,00020,00020,75020,750

(a) based on round voyage economics at ‘market’ speed, eco, non-scrubber basis

Bunker Prices ($/tonne)

wk on wk changeNov 6thOct 29thLast Month*
Rotterdam VLSFO  -7432439437
Fujairah VLSFO  +5455450489
Singapore VLSFO  +3464461478
Rotterdam LSMGO  +13713700660

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